POLLUTION in Cabramatta Creek is so bad wildlife seeks refuge in the backyards of local residents.

Liverpool residents Bernard and Michelle Fortin, whose property backs onto the Elouera Bushland Reserve, said they were shocked to find large water birds searching for food and water on their properties.

Mr Fortin said Cabramatta Creek has long had a problem with pollution but native wildlife fleeing their homes was not a good sign.

"This pollution is an ecological disaster," he said.

"There is a septic smell coming from that site and the river is covered in a greasy film.

"Every time it rains, rubbish travels down the canal and piles up on the banks, it's just horrible.

"We hardly go down there any more."

Cabramatta Creek feeds into the Chipping Norton Lakes and from there the water feeds into the Georges River.

Mr Fortin said he was concerned pollution on a local level would affect the condition of water all around Sydney.

The pollution revelations have come about just weeks after a state government decision to cut 70 per cent of the Streamwatch program funding.

Nature Conservation Council of NSW chief executive, Pepe Clarke, said the cuts undermined the effectiveness of the program. Without active monitoring, there was a greater chance pollution of waterways would go unnoticed.

Liverpool Council general manager Farooq Portelli said both the council and Sydney Water were aware of the condition of the creek.

Sydney Water had recently collected samples of the contaminated water for analysis.

Mr Portelli said the council's environmental health officers, and Sydney Water representatives had carried out full inspections of the area since first being advised of the problem.

"Inspections have been carried out at industrial complexes that drain into the catchment without success," he said.

"Council is currently addressing cleaning-out of the system, but this will take a few days to undertake."

"As far as determining the source, once the analysis is complete we will continue with investigations to try to find the source.

"It is likely council will need to enlist the assistance of the public with the investigation."